• 14 July, 2024
News

Binance to Reduce Stake in South Korean Crypto Exchange GOPAX

Binance, the world’s largest cryptocurrency exchange by trading volume, is in talks to reduce its stake in South Korean crypto exchange GOPAX. The move comes as Binance faces regulatory scrutiny in the United States and other countries.

Crypto exchange Binance acquired a majority stake in GOPAX in February 2023, but the deal has not been approved by South Korea’s Financial Services Commission (FSC). The FSC has expressed concerns about Binance’s compliance with anti-money laundering (AML) regulations.

In a statement, Binance said that it is “in early-stage discussions” about reducing its stake in GOPAX. The company said that it is “committed to working with the FSC to resolve any outstanding issues.”

The news of Binance’s plans to reduce its stake in GOPAX has sent shockwaves through the South Korean crypto community. GOPAX is one of the five fully registered crypto exchanges in South Korea, and its closure would be a major blow to the industry.

It is unclear what impact Binance’s decision will have on the South Korean crypto market. However, it is clear that the regulatory environment for cryptocurrencies is becoming increasingly challenging, and exchanges like Binance will need to adapt to survive.

The South Korean crypto market is one of the most regulated in the world. The FSC has implemented a number of regulations to protect investors, including a ban on anonymous trading and a requirement for exchanges to obtain a license. South Korea’s Financial Services Commission has proposed rules to protect virtual asset service provider customers, under the Virtual Asset User Protection Act

The act includes criminal penalties and fines for unfair trading activities and requires exchanges to monitor abnormal transactions. The FSC’s concerns about Binance’s AML compliance are likely to be shared by regulators in other countries. 

Previously, the Philippines’ Securities and Exchange Commission (SEC) had warned sternly against Binance, the globally renowned cryptocurrency exchange. Investigations revealed that Binance, despite its international presence, operated without the necessary authorizations in the Philippines. Additionally, when operating on a ‘Preparatory MVP’ crypto license in Dubai, Binance was asked to furnish more details by the regulator, the Virtual Assets Regulatory Authority (VARA).

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